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Audits

Auditor General of Canada

Our auditor is the Auditor General of Canada. The Auditor General performs special examinations and annual financial audits and audits the implementation of our Environmental and Social Review Directive.

We are a seven-time winner of the Auditor General's Award for Excellence in Financial Reporting.

Special Examinations

A special examination is a performance audit of a federal Crown corporation conducted by the Auditor General of Canada at least once every 10 years. The examinations provide an independent audit opinion to the Board of Directors and the appropriate Minister and Parliament on the management of EDC.

In particular, the Auditor General examines whether our financial, management and information systems and practices provide reasonable assurance that our assets are safeguarded and controlled; whether our financial, human and physical resources are managed economically and efficiently; and whether operations are carried out effectively.

The last Special Examination was conducted in 2009. The report noted: "The Corporation has in place the key elements of a good governance framework. It has a sound corporate planning process that provides clear direction for its activities and considers relevant information from a number of sources, including its Board of Directors.” 

Internal Audits

Our Internal Audit group conducts annual audits as per a risk-based audit plan which is approved by the Audit Committee of the Board of Directors. After each audit, a report is issued which includes our opinion on the related internal controls, a summary of each finding and our recommendations.

View our Internal Audit Reports

Audit Opinions, rating systems and follow-up

Audit Opinions

Audit opinions relate to the process being audited, and do not reflect an overall opinion for EDC. There are four audit opinions.

  • Strong controls: Key controls are effectively designed and operating as intended. Best in class internal controls exist. Objectives of the audited process are most likely to be achieved.
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  • Well controlled: Key controls are effectively designed and operating as intended. Objectives of the audited process are likely to be achieved.
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  • Opportunities exist to improve controls: One or more key controls do not exist, are not designed properly or are not operating as intended. Objectives of the process may not be achieved. The financial and/or reputation impact to the audited process is more than inconsequential. Timely action is required.
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  • Not controlled: Multiple key controls do not exist, are not designed properly or are not operating as intended. Objectives of the process are unlikely to be achieved. The financial and/or reputation impact to the audited process is material. Action must follow immediately.

Audit Rating System

  • Major: A key control does not exist, is poorly designed or is not operating as intended and the financial and/or reputation risk is more than inconsequential. The process objective to which the control relates is unlikely to be achieved. Corrective action is needed to ensure controls are cost effective and/or process objectives are achieved.
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  • Moderate: A key control does not exist, is poorly designed or is not operating as intended and the financial and/or reputation risk to the process is more than inconsequential. However, a compensating control exists. Corrective action is needed to avoid sole reliance on compensating controls and/or ensure controls are cost effective.
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  • Minor: A weakness in the design and/or operation of a non-key process control. Ability to achieve process objectives is unlikely to be impacted. Corrective action is suggested to ensure controls are cost effective.

Audit Follow-up Process

As required by the standards of the Institute of Internal Auditors, Internal Audit monitors the disposition of audit engagement results communicated to management to ensure that action is taken or that senior management, and the Board where necessary, has accepted the risk of not taking action. Administrative or substantive follow-up is performed depending on the original audit opinion.

Administrative Follow-up

An administrative follow-up assesses the overall implementation rate of audit responses to recommendations. A high implementation rate across the organization signifies management’s commitment to the continuous improvement of internal controls. An administrative follow-up report is issued quarterly and posted on EDC’s external web site with four possible opinions.

  • Strong:100% of the audit recommendations due to be implemented in the current quarter were completed.
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  • Well controlled: 70% - 99% of the audit recommendations due to be implemented in the current quarter were completed.
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  • Opportunity Exists to Improve Implementation Rates: 50% - 69% of the audit recommendations due to be implemented in the current quarter were completed.
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  • Not controlled: less than 50% of the audit recommendations due to be implemented in the current quarter were completed.

Substantive Follow-up

A substantive follow-up ensures corrective actions have addressed previously identified issues at the audit engagement level. Assessing if corrective action has been taken is done by completing a walkthrough of the new/revised control(s) and testing to ensure these control(s) are operating as intended. A follow-up audit report is issued using one of the same four opinions as were possible for the original audit, and the opinion paragraph of the follow-up report would highlight the original opinion and current opinion based on results of substantive follow-up audit.

Annual Report

Changing Trade – 2016 Annual Report

Detailed information on our performance measures and highlights.